86R6531 GRM-D
By: Hinojosa S.B. No. 1481
A BILL TO BE ENTITLED
AN ACT
relating to the exemption from the franchise tax and certain filing
fees for certain businesses owned by veterans during an initial
period of operation in the state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Effective January 1, 2022, Section 171.0001(4),
Tax Code, is amended to read as follows:
(4) "Beginning date" means:
(A) [except as provided by Paragraph (B):
[(i)] for a taxable entity chartered or
organized in this state, the date on which the taxable entity's
charter or organization takes effect; and
(B) [(ii)] for any other taxable entity, the date
on which the taxable entity begins doing business in this state[; or
[(B) for a taxable entity that qualifies as a new
veteran-owned business as defined by Section 171.0005, the earlier
of:
[(i) the fifth anniversary of the date on
which the taxable entity begins doing business in this state; or
[(ii) the date the taxable entity ceases to
qualify as a new veteran-owned business as defined by Section
171.0005].
SECTION 2. Section 171.0005(a), Tax Code, is amended to
read as follows:
(a) A taxable entity is a new veteran-owned business only if
the taxable entity is a new business, at least 51 percent of which
is owned by one or more natural persons, and each of whom [in which
each owner is a natural person who]:
(1) served in and was honorably discharged from a
branch of the United States armed forces; and
(2) provides verification to the comptroller of the
person's service and discharge required by Subdivision (1).
SECTION 3. Effective January 1, 2022, Section 171.063(g),
Tax Code, is amended to read as follows:
(g) If a corporation's federal tax exemption is withdrawn by
the Internal Revenue Service for failure of the corporation to
qualify or maintain its qualification for the exemption, the
corporation's exemption under this section ends on the effective
date of that withdrawal by the Internal Revenue Service. The
effective date of the withdrawal is considered the corporation's
beginning date for purposes of determining the corporation's
privilege periods and for all other purposes of this chapter[,
except that if the corporation would have been subject to Section
171.001(d) in the absence of the federal tax exemption, and the
effective date of the withdrawal is a date earlier than the date the
corporation would have become subject to the franchise tax as
provided by Section 171.001(d), the date the corporation would have
become subject to the franchise tax under that section is
considered the corporation's beginning date for those purposes].
SECTION 4. Effective January 1, 2022, the following
sections are repealed:
(1) Section 171.0005, Tax Code, as amended by this
Act;
(2) Section 171.001(d), Tax Code;
(3) Section 171.204(d), Tax Code; and
(4) Section 12.005, Business Organizations Code.
SECTION 5. The following provisions of Chapter 329 (S.B.
1049), Acts of the 84th Legislature, Regular Session, 2015, are
repealed:
(1) Section 2, which amended Section 171.0001(4), Tax
Code, effective January 1, 2020;
(2) Section 6, which amended Section 171.063(g), Tax
Code, effective January 1, 2020;
(3) Section 9, which provided for the repeal of
certain laws effective January 1, 2020; and
(4) Section 10, which provided a transition provision.
SECTION 6. The changes in law made by this Act that take
effect January 1, 2022, do not apply to a business that first
qualifies before that date as a new veteran-owned business as
defined by Section 171.0005, Tax Code, as that section exists
immediately before that date. A business that first qualifies
before January 1, 2022, as a new veteran-owned business is governed
by the law in effect immediately before that date, and that law is
continued in effect for that purpose.
SECTION 7. Except as otherwise provided by this Act, this
Act takes effect September 1, 2019.